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Saving For a Space Ship

Uk House Prices Dip In August

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http://www.ft.com/cms/s/0/2b86288c-617d-11...00779fd2ac.html

Published: September 13 2007 00:42

House prices dipped in August for the first time in nearly two years and surveyors’ confidence in the price outlook dropped to its lowest level since June 2005, according to a survey published on Thursday.

The findings add to evidence that the housing market is slowing as lenders pass on the costs of interest rate rises and as the obstacles for first-time buyers increase. They reflect fears that conditions for buyers could toughen if the squeeze in credit markets spills over further into mortgage rates.

Bank of England data this week showed mortgage rates were rising faster on riskier products. On Wednesday, the decision by the lenders Abbey and Standard Life to raise tracker mortgage rates raised the prospect of a broader toughening.

The Royal Institution of Chartered Surveyors said 1.8 per cent more surveyors reported a fall in prices than those seeing a rise, as the number of inquiries from new buyers dropped at its fastest pace in three years.

The figures are at odds with reports released by the Halifax and Nationwide showing house price growth slowed but remained positive in August. However, the Bank of England will take more interest in surveyors’ expectations that prices and sales will fall further.

Market conditions tightened in August, as fewer people put property on the market. The ratio of sales completed in the last three months to the stock of unsold property increased to 37.6 per cent, above the long-run average.

The most widespread falls in prices took place in the West Midlands, East Anglia and the north-west. London remained the exception, with all surveyors reporting constant or rising prices, and confidence in future sales improving.

Simon Rubinsohn, chief economist at RICS, said the capital’s resilience suggested that problems in credit markets had not yet fed through to housebuyers, and that the gap could close if lenders became wary of borrowers reliant on City bonuses.

The RICS survey follows signs that interest rate rises, near-record price-to-income ratios and increasing caution among lenders could be pricing many first-time buyers out of the market.

“Mortgage rates in the mainstream market will not be shielded for long,” said Ed Stansfield at Capital Economics. “The longer the credit squeeze goes on, the more likely it is that all mortgage rates will rise.”

Edited by Saving For a Space Ship

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Guest Shedfish

...glad it's turned up on the FT - i'd just heard it on bloomberg and thought i'd dreamt it.

interestingly, the Bloomberg flash on tv reported "1.8 per cent more surveyors reported a fall in prices" as "prices fell 1.8 per cent". more muesli spitting than usual this morning?

assuming it'll turn up here at some point..

http://www.rics.org/Property/Residentialpr...ket_surveys.htm

http://www.bloomberg.com/apps/news?pid=206...LY&refer=uk

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I know that this data has many threads on this site at the mo and clearly made the front page of many newspapers but...if I understand it correctly it is saying that 1.8% more EAs saw prices fall than rise. That means that there is a good number of EAs seeing prices rise, it is just that there are 1.8% more seeing prices fall. This may well be significant but what exactly is "seeing prices fall"? Does that mean there have been no price increases on any property in that EA? Or perhaps more price falls than price rises, or maybe seeing a price fall on a few properties but as this is unusual it stands out. How scientific is this?

The article above also claims that there is a descrepency between this data and the halifax / nationwide reports, but surely the price rises prices can still offset the price falls in monetory terms, even though more EAs have seen a fall?

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http://news.bbc.co.uk/1/hi/business/6992586.stm

BBC website only have it as a small side story, and a very gentle take on the story, still worth clicking to the top of the most read to encourage the "sheeple" to have a read

a telling contrast with their presentation of bullish stories, n'est pas?

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http://news.bbc.co.uk/1/hi/business/6992586.stm

BBC website only have it as a small side story, and a very gentle take on the story, still worth clicking to the top of the most read to encourage the "sheeple" to have a read

I particularly liked this bit:

However, Rics has traditionally had its finger on the pulse of the market when it has changed direction - as during the property slump of the early 1990s, when many other commentators refused to acknowledge that prices were falling

This is going to be part of the credit squeeze at the mortgage end I think. If they see prices falling, and presumably they feel the need to be professional and not put their clients at risk, surveyors are going to go back to being conservative and will mark down prices. Couple that with the reticence to lend at high LTVs for the less than prime customers which has suddenly become a bad idea, prices will "dampen"* further.

* VI speak for Tsunami.

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I know that this data has many threads on this site at the mo and clearly made the front page of many newspapers but...if I understand it correctly it is saying that 1.8% more EAs saw prices fall than rise. That means that there is a good number of EAs seeing prices rise, it is just that there are 1.8% more seeing prices fall. This may well be significant but what exactly is "seeing prices fall"? Does that mean there have been no price increases on any property in that EA? Or perhaps more price falls than price rises, or maybe seeing a price fall on a few properties but as this is unusual it stands out. How scientific is this?

The article above also claims that there is a descrepency between this data and the halifax / nationwide reports, but surely the price rises prices can still offset the price falls in monetory terms, even though more EAs have seen a fall?

It's nothing to do with EAs. RICS represents chartered surveyors.

As for how scientific is this, how scientific are all the other indexes - especially the VI ones based on initial asking prices?

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